Stamp duty rises for second homes cancelled out by stalling price growth in luxury London market

Slow price growth offsets cost of higher stamp duty for London investors and second home buyers looking for high-value homes.

Slower price growth at the top end of the central London market is absorbing the cost of higher stamp duty on properties bought by investors and second home buyers.

Investors and second home purchasers are effectively saving money on the cost of a property as prices at the luxury end of the market have slowed in the last year as a result of stamp duty rises and the uncertainty caused by Brexit.

According to research carried out by Private Finance, investors and second home buyers in London can save on average £169,410 as a result of slowing property price rises. This far exceeds the increased cost of stamp duty, which amounts to £77,431 for high-value properties.

This is positive news for potential second home buyers and investors keen for a slice of London's luxury property market, and who want to buy in areas such as Knightsbridge or Belgravia.

The additional 3% stamp duty surcharge was introduced in April 2016, and this change has affected the prime London market in particular.

Property price rises have slowed at the top end of the market, more so than across the rest of the market.

Director of Private Finance, Shaun Church, said: "If there is one silver lining for would-be buyers and investors, it’s that slower growth of high-value property prices has had a positive impact on affordability. A buyer today can pay markedly less for a high-value property at the top end of the ladder than if growth had kept pace with the rest of the market, making it easier to absorb any extra stamp duty fees."

Multiple stamp duty changes have occurred in recent years, affecting the property market as a whole. Now, slowing price rises on high-end properties is positive for potential buyers.

The Property Industry has always and continues to interest me, and after joining Plaza Estates in 2008 I have experienced a market which has taught me alot. In my role advising clients on their purchases (together with our sales teams), managing the refurbishments for them (together with our management and design team), preparing the property for rentals (together with our rentals teams) or sales and being responsible for the Companies digital marketing I have seen the market from various aspects. The market is always changing and it is essential we constantly adapt, which since Plaza Estates was established in 1972 is something the company has always done. We pride ourselves in the personal relationship and service we have and give all our clients and being part of a company which is "big enough to cope and small enough to care" is something I really enjoy.